WPP hails global return to spending

CLIENTS of advertising giant WPP are switching their strategy from cost-cutting to growing their sales, according to chief executive Sir Martin Sorrell.

'There is evidence that companies are focusing on top-line growth and branding rather than the cost-cutting which they have pursued since the dotcom bubble burst in 2000,' said Sorrell.

WPP today said it broke through the £1bn revenue barrier for the first time in a first quarter, which is always its weakest trading period. Thanks partly to the $1.5bn(£785.7m) purchase of Grey Global, revenues rose by 16% to £1.11bn in the three months to end-March. Like-for-like revenues grew 6%.

Sorrell said of the world economy: 'The rain showers have been postponed for the time being.'

Asia, Latin America and North America were the fastest-growing regions, with advertising and media buying the strongest sectors. Western Europe was behaving like an aged company, said Sorrell, 'with little growth and worrying about its healthcare and pension provisions'.

But he added that France and Germany were doing 'less worse than they were nine months ago'. He was 'a little bit worried that there will be the usual post-election depression in the UK, but nothing too serious'.

WPP lost Jaguar and Sony Electronics as clients during the quarter but won business with Novartis, Volkswagen, Texas Instruments, Cingular, Danone, LG, Swatch, Kellogg's, Muller and SABMiller. Net new business billings of £875m were won in the past three months.